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Closing the LLP Packages

STANDARD

₹ 12999/- (All Inclusive)
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  • Wind up an LLP with no transactions since incorporation
  • Preparation of Statement of Accounts
  • Preparation of Indemnity Bond
  • Preparation of Affidavits
  • Documents preparation

ENHANCED

₹ 14999/- (All Inclusive)
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Popular
  • Everything in STANDARD+
  • 2 Directors' DIR 3 KYC
  • 2 DSC Application Class III Individual 2 Year Validity

PREMIUM

₹ 22999/- (All Inclusive)
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  • Everthing in ENHANCED +
  • Form 8 and Form 11 Filing for 1 Financial year
  • Nil ITR filing
  • GST Cancellation Application
  • Filing of GSTR-10 (Final Return)

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Closing the LLP

Closing a Limited Liability Partnership (LLP) firm refers to the formal process of winding up and dissolving the business entity. This significant step is typically taken when the LLP has fulfilled its objectives, faces insurmountable financial challenges, experiences irreconcilable partner disagreements, or undergoes strategic changes. Properly closing an LLP is crucial to fulfill legal obligations, distribute assets, and settle liabilities, and it is regulated by the Ministry of Corporate Affairs (MCA).

Scenarios

Several scenarios may necessitate the closure of an LLP:

Fulfillment of Business Objectives

If the primary goals and objectives for which the LLP was formed have been achieved, partners may opt to close the business.

Financial Challenges

Insurmountable financial difficulties, including excessive debts, losses, or inability to meet financial obligations, can lead to the decision to wind up the LLP.

Irreconcilable Partner Disagreements

Ongoing disputes and conflicts among partners that cannot be resolved amicably may prompt partners to close the LLP.

Strategic Changes

Shifts in the business environment, market dynamics, or a change in the strategic direction of the business may necessitate the closure of the LLP.

Detailed Procedure

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Resolution
Partners must pass a resolution to initiate the process of closing the LLP. This resolution should be approved unanimously.
Statement of Accounts and Solvency
Prepare and file a Statement of Accounts and Solvency, as mandated under Section 37(1) of the LLP Act, 2008.
Application for Closure
Prepare and file Form 24 with the Registrar of LLP, providing information about the LLP's assets, liabilities, and the consent of partners.
Settlement of Debts
Notify creditors and settle all outstanding debts and liabilities of the LLP.
Asset Distribution
Distribute the remaining assets among partners as per the agreed-upon terms.
Publication
Publish a notice about the LLP's closure in an official gazette and a leading newspaper.
Clearance Certificate
Obtain a clearance certificate from the MCA, confirming the successful completion of the closure process.
Dissolution
Apply for the dissolution of the LLP with the MCA to formally conclude the existence of the LLP.

Documents Checklist

Resolution

  • Obtain a resolution from all partners approving the decision to close the LLP.

Partner Consents

  • Ensure that all partners provide their written consent to the LLP's closure.

Statement of Accounts and Solvency

  • Prepare and file the Statement of Accounts and Solvency as required by the MCA.

Form 24

  • Prepare and file Form 24 with the Registrar of LLP, detailing the assets, liabilities, and partner consents related to the closure.

Merits

Debt Settlement

Proper closure allows for the settlement of debts and liabilities, preventing future financial liabilities for partners.

Legal Obligations

Closing an LLP ensures that all legal obligations of the entity are fulfilled.

Financial Relief

If the LLP was facing financial challenges, closing it can relieve partners of further financial burden.

FAQ's

A: Generally, unanimous agreement among all partners is required to close an LLP.

 A: The timeline varies depending on factors such as the LLP’s financial state and legal requirements.

A: Assets are distributed among partners after settling debts and liabilities.

A: Yes, notifying and settling with creditors is a crucial step in the closure process.

A: Generally, partners’ liability is limited to the LLP’s assets during the closure process.

 A: Yes, dissolution formally concludes the LLP’s existence.

A: It is possible to apply for the revival of a closed LLP under specific circumstances.

A: Failing to follow proper closure procedures can result in legal liabilities and complications.

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